Artis Capital Management LP, a registered investment adviser, and Michael Harden, a senior analyst at Artis, settled charges brought by the Securities and Exchange Commission that they failed reasonably to supervise Matthew Teeple, an analyst at Artis, who, on at least two occasions in 2008, illicitly obtained insider information regarding Foundry Networks, Inc., a publicly traded company. The SEC charged that Artis relied on this information in making trading decisions for Artis-managed hedge funds. The SEC noted that, unlike an ordinary analyst, Mr. Teeple worked from home, did not use analytic models for his trading recommendations and did not provide written reports regarding his views. As a result, the SEC claimed, Mr. Harden should have been suspicious when Mr. Teeple made recommendations to buy Foundry in July 2008, and five days later Foundry announced it would merge with a third party. According to the SEC, Mr. Harden also failed to question another recommendation regarding Foundry by Mr. Teeple in October 28 followed by predicted corporative activity. Among other things, Mr. Foundry, in response, did not consult with Artis’s chief compliance officer as required by Artis’s policies, charged the SEC. As a result of trading on the alleged insider information forwarded by Mr. Teeple, Artis achieved profits and avoided losses of approximately $25.3 million, and achieved other income of approximately $5.17 million (e.g., through management agreements with the funds). To resolve this matter, Artis agreed to pay a total penalty of almost US $9 million, including almost US $5.17 million in disgorgement, while Mr. Harden agreed to pay a fine of US $130,000. Mr. Teeple previously settled civil and criminal charges related to his conduct.